F&C’s rocky AuM ride since 2008

Mountain peakF&C Asset Management, which this week reported a fall in assets, has seen its assets rise and fall by around £15 billion (€17.5 billion) since the start of the banking crisis.

Yesterday F&C reported assets under management (AuM) of £95.2 billion for the last quarter of 2012 – a fall from £96.8 billion at the end of the third quarter.

Back in October 2008, about a month after Lehman Brothers filed for bankruptcy, the FTSE 250 fund manager reported AuM of £93.3 billion.

In between then and now AuM had reached as high as £108.2 billion. This was in 2010 after the Thames River acquisition. Thames River added £4.2 billion to F&C’s assets at the end of the third quarter that year.

It wasn’t just down to Thames River, though. F&C had seen £600 million of net inflows during the quarter and had £1.6 billion of new business in the pipeline.

But by the end of 2011 AuM was back down to £100.1 billion. The trouble then was with F&C’s strategic partners business, which had seen a £3.9 billion outflow including £1.3 billion caused by the nationalisation of past pension obligations within Portugal’s largest banks.

During that same quarter, Friends Life, another client in F&C’s strategic partners business, gave 12 months notice to withdraw £2.3 billion because it intended to launch its own in-house asset management subsidiary.

Friends Life is expected to in-source a further £6.2 billion of fixed income assets by mid-2013, leaving £2.4 billion remaining with F&C.

Richard Wilson, chief executive, pointed out yesterday that performance in the fourth quarter of 2013 was good in most asset categories and revenue yields on inflows continue to exceed those on outflows.

“We look forward to continuing progress in executing our third-party institutional and consumer growth strategies,” he said.

It is this part of the business that appears to keep analysts positive, too.

Jonathan Goslin, analyst at Edison Investment Research, says “Investment performance in the consumer and institutional business was positive, generating 2.8% AUM growth in the quarter, reflecting robust performance across the majority of business areas.”

©2013 funds europe